Two members of the Czech development team were arrested on the Greek island of Lemnos after they were caught gathering intel on local military facilities, reports News247.
It is believed the pair, aged 28 and 33, were doing research for upcoming shooter ARMA 3, and were in possession of photographs and video tapes of a military camp.
The arrests were confirmed by Bohemia Interactive CEO and co-founder Marek Spanel, who told forum users that he wouldn't discuss the matter further until specific details were released.
"This is true. We prefer this topic not to be discussed on our forums atm, at least until we know more specific details about the case so I am going to close this topic and our moderators are going to close any related discussion here, thank you for understanding," writes Spanel.
Bohemia Interactive was embroiled in another controversy last year, after footage from ARMA 2 was used in a documentary about the IRA.
ARMA 2 spawned spinoff Day Z, an online open-world zombie apocalypse simulator where players must scavenge for resources, surviving amongst the undead and other players.
Released in April, the free mod has fuelled sales of 300,000 copies of Arma 2 since being released.
Dean Hall confirmed to Digital Spy that the popular zombie survival Arma 2 mod would receive a standalone release, recently announcing that it would adopt the Minecraft release model.
The standalone version of Day Z is targeting a September release, though no official date has been given.
Watch a video for Day Z below: